MAY 13, 2008

Out there in FIA land

There seems to be plenty of action going on in FIA circles at the moment, as the members clubs try to work out what to do about the Mosley Scandal. With the meeting of the FIA General Assembly still three weeks away, there has been a lot of quiet politicking going on. It seems that there will be around 180 votes cast when the assembly considers whether or not it has confidence in Max Mosley as FIA President. In order for the vote to be passed, Mosley needs 50% of the votes plus one in his favour. If he fails to get that it remains unclear as to what will happen. The statutes, or at least the public documents available, do not seem to cover this eventuality.

However, it is hard to imagine that Mosley will go into the General Assembly without a plan and there are some who believe that he will try to side-step the problem with a pre-emptive strike, offering the FIA a constructive alternative to simply throwing him out and then trying to decide who will take over.

One thing that Mosley obviously wants to be able to do is to tell the FIA delegations who was responsible for the revelations about his private life, and why those revelations came into the public domain. Mosley has said that he was the victim of a deliberate plot to overthrow him and he will no doubt portray this as an assault on the FIA itself. In order for this to be a persuasive argument, however, he needs to be able to name names and to show what that plot was trying to achieve. To do that he needs solid proof, and this is presumably why he has hired the Quest investigation agency to figure out what has been going on. There is no getting away from the fact that he fell into the trap and thus damaged the FIA, but he has apologised for that, says that his private habits are his own business and intends to spend his twilight years changing the privacy laws of England and presumably convincing the world that the activities in which he was engaged are no less acceptable than other sexual preferences that were once unacceptable and are now considered non-taboo.

The fact that Mosley did not resign immediately and save the FIA all the grief is something that needs to be explained as well. There must be some credible explanation as to why he had to stay on.

We have heard that several large member clubs on the touring side of the federation, which all have significant commercial operations, are trying to get sufficient votes to win control of the FIA. If they do not achieve this it has been suggested that they will use the Mosley Scandal as an excuse to secede and start a parallel organisation. The FIA sporting clubs are obviously opposed to the idea of the touring clubs being in control of the sport and, at the same time, they seem willing to let these organisations go. A new alliance of commercially-minded touring clubs without any involvement in the sport would not necessarily be a bad thing, as long as there is a clear understanding that the FIA's influence in the regulation of motorsport and as a lobbying organisation at government level is not challenged.

What the FIA needs to avoid is any new alliance trying to claim the right to organise motorsport events. As has been seen in boxing, there is no value at all in having multiple federations in competition with one another. In this respect Formula 1 is important because any attempt to challenge the FIA's power would require a credible World Championship to steal F1's thunder with immediate effect. The only way that could happen is if the F1 teams decided to jump ship together, which is not likely to happen.

There are already a number of small scale alliances along these lines. ARC Transistance, founded in 1991, is a commercial operation co-owned by some of the automobile clubs of Europe, this provides roadside assistance and benefits in travel, insurance and automobile financing. These include eight shareholder clubs and 17 associates. The shareholders include ADAC (Germany) 35%, ANWB (Holland) 20%, AA (UK) 20%, TCB (Belgium) 5%, OAMTC (Austria) 5%, TCS (Switzerland) 5%, ACI (Italy) 5% and Spain's RACE 5%. ARC is also involved in alliances with AAA Automotive, the US equivalent, and AA Asia, a similar initiative involving Asian touring clubs.

The threat of an internal takeover of the FIA by commercially-minded clubs is understood to have pushed some clubs towards supporting Mosley, even if they are not happy with what he has been up to.

It may be that this secession is inevitable if the touring clubs cannot win the fight within the federation. This would reduce the numbers of people represented by the FIA but would have little real effect on the organisation's powers as the new commercial operation would not be claiming any political influence.

From Mosley's point of view, the best move is to make sure that the clubs and the F1 teams are all happy. The best way to achieve this would probably be propose a completely new structure for the FIA, so that it will be revitalised and become a much better organisation than it has been during his presidency.

This would create a legacy to leave behind for posterity and obviously the better the legacy, the better his reputation.

Proposing a better FIA is also good idea as it will give the federation a purpose in the year that remains of his mandate. Whatever happens at the meeting there will need to be a completely new election process in the autumn of 2009, unless the General Assembly decides to overrule its own statutes, which may not be possible and may not be immediately desirable. We hear that there have been a number of working groups meeting in Switzerland in recent days to try to find a voting system on which everyone will agree and there would be a revamp of the statutes resulting from this.

A restructuring of the FIA would do a number of things. It would help to deflect attention away from Mosley's failings, while at the same time giving him a graceful way out. If, for example, he voluntarily stood down as FIA President to make way for others, while retaining some of the powers in a different role aimed at restructuring the FIA, it would be a neat way to drop from the limelight.

One of his justifications for staying on in some role is that he wants to finish the delicate task of sorting out the commercial structures for the sport in the years ahead, including a new promotional deal for the World Rally Championship and, it is rumoured, a rethink of the 100-year deal for F1's commercial rights. It has been suggested to us that it is not inconceivable that Mosley might try to redefine the commercial arrangements in F1 thus creating a more beneficial situation for the FIA clubs and the F1 teams.

There have been a lot of disgruntled people in FIA circles ever since the original deal was done for a mere $350m. Given that a recent survey by the Deloitte company suggested that every Grand Prix generates an average of $217m in revenues, a deal for 100 years for the cost of one and a half Grands Prix does not seem a very good one. The teams have also been unhappy with the percentages they have been getting and although that has been increased to 50%, it is still only 50%. The remaining money leaves the sport.

The problem with such a move is that while it might win support from the clubs and the teams, it would put the FIA and Mosley into conflict with his longterm ally Bernie Ecclestone and his financial backers CVC Capital Partners. Redefining of the commercial arrangements and restructuring the FIA could create a completely different federation and a very different sport. It could also create chaos.

Mosley is a tough leader and there are few who think that such things could be achieved without him, but he would get support from various parties if he were to propose such a move.

This may all just be shadow boxing, but it is worth considering some of the rumours doing the rounds at the moment.

We have heard the suggestion that the first step in this process could be a proposal for the FIA president role to become much more of a figurehead, with a professional chief executive officer being recruited to run the organisation along more corporate lines, and perhaps the two Deputy-President roles for Sport and Mobility being given a great deal more autonomy. It is not clear at the moment who might be proposed for the various roles, but it is anticipated that the role of president could provide a post-political career for someone. French stories suggesting that the current Prime Minister Francois Fillon might be a possible candidate have been dismissed as being the result of an off-the-cuff joke made to a political reporter that was then turned into a story, but perhaps there is more to that idea than meets the eye.